Rio Tinto warns of China risks and global demand slowdown

Rio Tinto warns that slowing global economy and weak confidence in China’s property market create ‘further downside risks’ for mining giants looking to unlock more iron ore production at key Pilbara mine Did.

Rio’s main Pilbara sector shipped 82.9 million tonnes of iron ore in the three months to September, but the company said annual shipments ranged from 320 million to 335 million tonnes. is expected to be at the lower end of the forecast for

Iron ore, a key raw material for steel production, is Australia’s most profitable commodity, contributing $133 billion to the country’s overall export earnings last financial year. Strong demand from China pushed benchmark iron ore prices to a record high of $230 per tonne last year. However, against the backdrop of China’s zero-tolerance approach to COVID-19, colored ore prices have cooled and the Chinese economy is in a slump.

Pandemic-related construction activity disruptions have dampened steel production and consumption in China, a major market for Rio’s ore, with demand falling by about 9% in the year to August compared to the same period in 2021. % is decreasing. Chinese iron ore is increasing. Portside iron ore cargo is usually delivered within a few days of payment as compared to sea freight which has a lead time of 30-60 days from the time of booking to arrival.

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Rio Tinto Chief Executive Jakob Stausholm warned that commodity prices were trending downwards in the fourth quarter and that demand is likely to fall further as the global economy cools. The mining giant added that global consumer confidence is declining and aggressive rate hikes are increasing the risk of recession in the US and Europe.

Iron ore shipments from the Pilbara were up 4% from the previous quarter despite an unplanned rail stop on the Yandicoogina mine line and a major derailment on the Gudai-Darri line.

The miners also agreed to modernize and renew a 50-year-old joint venture agreement with Wright Prospecting to unlock the Rhodes Ridge deposit in East Pilbara.

The deal accelerates a 40 million tonne project that has been up in the air for decades as a dispute between prospector Peter Wright’s heiress and Gina Reinhart’s Hancock Prospecting unfolded.